BMF BMBI Q1 2016 Report and Comment – OUT NOW

Roofing had a slow first quarter, echoing the recently published manufacturing figures. The storms late last year may also have pulled forward roofing works that might have been fixed in Spring in better weather.

There’s been a significant slowdown in new build commercial and retail projects; 10-20% down on last year. This will impact our sector in 6-8 months’ time when contractors would normally be putting the roofs on. The ‘Brexit effect’ undoubtedly has something to do with this. Housebuilding could do with more of a boost too as we’re simply not building enough houses overall, but housebuilders have little incentive to increase supply and lower prices and profits.

It’s difficult to get a handle on RMI at the moment – some commodity products are doing well although commercial and public sector refurbishment had a slow start to the year. There are a lot of projects in the pipeline – so no major concerns – but funding cuts from local government seem to be taking effect as schools, for example, don’t get the new roofs they need.

Retail is unsettled as Bunnings acquires Homebase and is pricing aggressively to take market share, with an ‘Every Day Low Prices’ strategy designed to tackle consumer perception of their previously expensive retail prices. Homebase leapt over B&Q & Wickes for the lowest priced basket in year-on-year comparisons in the Insight iPaint 30 report. Who will it affect the most, and who will come out fighting? We’ll have to wait and see.

Skills shortages and recruitment continues to be a constraint on current work and a concern for the future. When projects are approved, we should all be worried about how the industry will service them. Are there enough skilled workers out there? This comes full circle back to Brexit again, as the UK was built through the employment of immigrants from the Poles to the Irish.

Download the full 2016 Q1 report here